Oil down 1% as U.S. dollar firms

05 Nov Oil down 1% as U.S. dollar firms

U.S. oil prices dropped on Thursday as the dollar strengthened on growing expectations Democrat Joe Biden would win the U.S. presidential election but the Republicans would retain Senate control, holding back any huge COVID-19 relief package.

Oil prices generally fall as the U.S. dollar rises because crude priced in dollars becomes more pricey for foreign buyers.

U.S. West Texas Intermediate (WTI) crude futures fell 40 cents, or 1%, to $38.75 a barrel at 0141 GMT, while Brent crude futures dropped 41 cents, or 1%, to $40.82 a barrel. Both contracts had jumped around 4% on Wednesday.

“The volatility in oil will remain because of its sensitivity to the U.S. dollar. And the U.S. dollar will remain volatile for at least the next few days as the U.S. election still has to be worked out,” said Commonwealth Bank commodities analyst Vivek Dhar.